HSCEI Korea structured product losses spark regulatory fears

Potential losses for global banks and local firms estimated at $300 million


Heavy falls in China indexes linked to Korean structured products have hit dealers' hedging programmes hard with losses estimated at around $300 million across the Street and potentially the threat of regulatory intervention.

On August 3 the Hang Seng China Enterprises Index (HSCEI) – which tracks China firms listed in Hong Kong – stood at 11,009 and has now fallen precipitously to 9,400. This is a problem for the autocallable market where retail investors are selling put options because a

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